Proteins encoded by tumorigenic retroviruses may be synthesized as hybrid proteins, containing both viral structural and transformation domains, or as homologs of cellular proteins devoid of any viral structural elements. Cells infected with MC29 virus produce such a hybrid protein, p110 gag-myc, which contains a viral domain (gag) fused to a cellular domain (myc). This protein migrates to the nucleus soon after synthesis, and can be found associated with the nuclear matrix, and possibly with nucleoli. The protein has a short half-life in the cells, and other protein and RNA factors have been shown to be involved in its degradation. The p110 was shown to exist in both monomeric and dimeric forms intracellularly. A cellular protein, p55, can be immunoprecipitated from avian cells using antisera against the myc domain. The p55 also was found in the nuclear matrix, and could associate into dimers. Another transforming virus, avian myeloblastosis virus, similarly produces a proteins, 048, which is found in the nuclear matrix as a dimer and has a short half-life. Cells transformed by MC29 virus and related viruses have enlarged nucleoli which are not a consistent feature of other transformed or nontransformed cells. These myc-transformed cells incorporated a high proportion of radioactive uridine into nucleolar RNA. Transcription in isolated nuclei was more resistant to an inhibitor of RNA polymerase I than non-myc cells, demonstrating an enhanced level of ribosomal RNA synthesis. Several other differences in the in vitro transcription characteristics of myc-transformed and other cells have been noted. Also, a specific protein, p98, has been found associated with nucleoli of cells transformed by myc viruses. The basis for increased nucleolar transcription is under investigation.